Wells Fargo and a number of other lenders are negotiating to take control of a hedge fund previously valued at more than $2 billion that is now worth close to nothing, according to a report from the Wall Street Journal.

EnerVest Ltd., a Houston private equity firm that focuses on energy investments, manages the private equity fund that focused on oil investments. The fund will leave clients, including major pensions, endowments and charitable foundations, with at most pennies on the dollar, WSJ reported.

The firm raised and started investing money beginning in 2013 when oil was trading at around $90 a barrel and added $1.3 billion of borrowed money to boost its buying power. West Texas Intermediate crude prices closed at $46.54 a barrel on Friday.

Only seven private-equity funds worth more than $1 billion have ever lost money for investors, according to data from investment firm Cambridge Associates LLC cited in the report. Among those of any size to end in the red, losses greater than around 25 percent are extremely rare, though there are several energy-focused funds in danger of doing so, according to public pension records.

Clients included the J. Paul Getty Trust, John D. and Catherine T. MacArthur and Fletcher Jones foundations, which each invested millions in the fund, according to their tax filings, the Journal reported. Michigan State University and a foundation that supports Arizona State University also disclosed investments in the fund.

The Orange County Employees Retirement System was also an investors and has reportedly marked the value of its investment down to zero.

This entry was posted
on Tuesday, July 18th, 2017 at 1:55 am and is filed under EnerVest.
You can follow any responses to this entry through the RSS feed.
You can leave a response, or trackback from your own site.

Securities arbitration and litigation on behalf of institutional investors, municipalities, high net worth investors, retail investors, individual investors, and employees in California, Texas, New York, Washington D.C. and around the country, including the major metro areas of Los Angeles, San Francisco, San Diego, Dallas, Houston, New York, and more. We are securities fraud lawyers/investment fraud attorneys focused on all types of financial fraud cases.